In last weeks edition of Heard on the Street, I left readers with this chart. I've added channel lines tonight. Notice that in both the impulsive decline and the corrective rally from w.3 red, price remains within their respective channels.
In the case of the latter, the move from 1138 appears to be impulsive and deep which causes concern for the overall count from w.4 red. Yet, as long as price remains within the corrective channel, the structure should be assumed to be corrective.
Drilling down to the intraday chart level, I have two counts. Both counts are looking down if w.a circle is complete that will be followed by another up sequence to complete either w.ii circle or w.Z of a triple three. The difference between the two patterns can be distinguished by the depth of the rally whereas:
- w.ii circle can't exceed 1229.75 and
- w.Z will exceed w.4 red
....and both , when complete will be fully retraced and resolve to new lows.
Let's see what develops tomorrow.
Best of Trading
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